Q-Cells Hires Houlihan Lokey to Look Into Mid-Term Financing

Q-Cells SE, the German solar cell and module maker whose shares have tumbled 64 percent this year, hired investment bank Houlihan Lokey to look into mid-term financing.

The manufacturer mandated the Los Angeles-based financial adviser recently, spokeswoman Ina von Spies said today in a phone interview. Q-Cells rose 0.91 percent to 89 euro cents a share as of 1:30 p.m. local time.

Q-Cells and its peers Solarworld AG and Conergy AG are struggling to offset a first half with low demand in Europe, where Germany, Italy and France have cut solar subsidies in the past 12 months. They’re also under pressure from Chinese manufacturers that have boosted production capacity just as cell and module prices slumped amid lower demand.

The Financial Times Deutschland newspaper reported the entry of Houlihan Lokey yesterday. It had also said Q-Cells is looking into insurance models as part of an effort to resolve client concerns over a possible bankruptcy.

While Q-Cells is “probing” whether to insure guarantees linked to its solar products, the move has “absolutely nothing” to do with a possible bankruptcy scenario, von Spies said.

“There’s simply a trend in the industry to offer these insurances” for product guarantees that can last up to 25 years, she said.

Q-Cells SE on Aug. 10 reported a quarterly net loss of 355 million euros ($505 million) and said it expects a full-year operating loss in the “three-digit million euro” range.

The company is shifting photovoltaic cell manufacturing to Malaysia from Germany in a bid to cut production costs and generate positive earnings before interest and tax next year.

Q-Cells targets as much as 350 million euros in cash by year-end, according to Chief Executive Officer Nedim Cen, who said Aug. 10 he sees demand for cells and modules picking up in Germany, the world’s biggest solar market.